Correlation Between Cembra Money and Eclectic Bar
Can any of the company-specific risk be diversified away by investing in both Cembra Money and Eclectic Bar at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Cembra Money and Eclectic Bar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cembra Money Bank and Eclectic Bar Group, you can compare the effects of market volatilities on Cembra Money and Eclectic Bar and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Cembra Money with a short position of Eclectic Bar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cembra Money and Eclectic Bar.
Diversification Opportunities for Cembra Money and Eclectic Bar
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cembra and Eclectic is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Cembra Money Bank and Eclectic Bar Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eclectic Bar Group and Cembra Money is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Cembra Money Bank are associated (or correlated) with Eclectic Bar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eclectic Bar Group has no effect on the direction of Cembra Money i.e., Cembra Money and Eclectic Bar go up and down completely randomly.
Pair Corralation between Cembra Money and Eclectic Bar
Assuming the 90 days trading horizon Cembra Money is expected to generate 7.28 times less return on investment than Eclectic Bar. But when comparing it to its historical volatility, Cembra Money Bank is 14.31 times less risky than Eclectic Bar. It trades about 0.22 of its potential returns per unit of risk. Eclectic Bar Group is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 2,700 in Eclectic Bar Group on November 8, 2024 and sell it today you would earn a total of 2,050 from holding Eclectic Bar Group or generate 75.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cembra Money Bank vs. Eclectic Bar Group
Performance |
| Timeline |
| Cembra Money Bank |
| Eclectic Bar Group |
Cembra Money and Eclectic Bar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cembra Money and Eclectic Bar
The main advantage of trading using opposite Cembra Money and Eclectic Bar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cembra Money position performs unexpectedly, Eclectic Bar can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Eclectic Bar will offset losses from the drop in Eclectic Bar's long position.| Cembra Money vs. Spotify Technology SA | Cembra Money vs. Pfeiffer Vacuum Technology | Cembra Money vs. Bytes Technology | Cembra Money vs. Vitec Software Group |
| Eclectic Bar vs. Empire Metals Limited | Eclectic Bar vs. Capital Metals PLC | Eclectic Bar vs. Gaztransport et Technigaz | Eclectic Bar vs. JD Sports Fashion |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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